Can A Binding Financial Agreement Be Overturned
The quick answer is that yes, a binding financial agreement can be overturned.
A court will determine whether or not the binding financial agreement is binding, and may overturn the agreement.
Remember that a binding financial agreement (BFA) is a private contract-like agreement between two parties that details how their property is to be managed and divided after divorce or separation.
Two spouses can make a binding financial agreement at any time before, during, or after marriage, separation, or divorce.
The parties to a binding financial agreement can overturn it themselves – by creating a new binding financial agreement or a termination agreement.
In a new binding financial agreement, you would have to include a provision that terminates the previous financial agreement.
Creating a new binding financial agreement is also the only way to update a previous agreement.
A termination agreement is simply a written agreement that states the end of the binding financial agreement.
Reasons for overturning a Binding Financial Agreement
The court has the authority to determine a binding financial agreement to be invalid and, therefore, to set it aside.
There are many reasons listed in Section 90K and Section 90UM of the Family Law Act 1975 that describe circumstances in which the court may overturn a binding financial agreement.
These reasons include:
- Fraud (including non-disclosure of a material matter),
- the intention to defraud a creditor of one of the parties,
- a party to the agreement signing it under duress; and
- a change in circumstances that would now make carrying out the binding financial agreement impracticable or inequitable (such as the birth of a child).
A binding financial agreement needs to have been validly created in the first place for it to be in fact binding.
There are strict requirements to ensure the validity of binding financial agreements: the agreement must be signed by all parties, the parties must have obtained independent legal advice prior to signing, each party has a signed statement from the legal practitioners and the agreement has not been terminated or overturned by the court.